Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Swift Company was organized on March 1 of the current year After five months of start-up ...

Swift Company was organized on March 1 of the current year After five months of start-up losses, management had expected to earn a profit during August Management was disappointed however

Swift Company was organized on March 1 of the current year. After five months of start-up losses, management had expected to earn a profit during August. Management was disappointed, however, when the income statement for August also showed a loss. August s income statement follows: Swift Company Income Statement For the Month Ended August 31 Sales .......................................................................................................... $450,000 Less operating expenses: Direct labor cost .............................................................. $ 70,000 Raw materials purchased ................................................. 165,000 Manufacturing overhead .................................................... 85,000 Selling and administrative expenses.. ............................... 142,000......... 462,000 Net operating loss ...................................................................................... $ (12,000) After seeing the $12,000 loss for August, Swift s president stated, "I was sure we d be profitable within six months, but our six months are up and this loss for August is even worse than July s. I think it s time to start looking for someone to buy out the company s assets-if we don t, within a few months there won t be any assets to sell. By the way, I don t see any reason to look for a new controller. We ll just limp along with Sam for the time being." The company s controller resigned a month ago. Sam, a new

Jun 24 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions